Cap HPI has warned that large car retail groups that inaccurate vehicle data could be costing their business £117,000 a year in findings from a profitability study carried out in partnership with the Institute of Transport Studies.
The vehicle data specialist set out to determine the impact of data on dealers’ used car profit margins and found that using data with poor coverage or less accurate valuations could prove costly.
It found that a dealer group with 19 sites, working 364 days a year, with a stock capacity of 108 vehicles per site, could lose out to the tune of £117,000 and that the differences in the nearly-new market were most pronounced.
Cap HPI found that if the dealer group purchased petrol stock three-years-old or under it would be over £247,000 a year better off with its data.
The methodology used to produce the results for this study was developed with expert support from the University of Leeds Institute for Transport Studies (ITS).
Dr Erik Thomasson, research and innovation development manager at ITS, said: “This study demonstrates the potential value to the automotive retail sector of intelligence and insight derived from its own data through applied data analytics.”
The Institute for Transport Studies (ITS) is an academic department of the University of Leeds and part of the Faculty of Environment.
The Institute's purpose is to advance the understanding of transport activity, operations and use, and to develop skills and best practice among transport professionals and decision-makers.
Matt Thompson, marketing director at Cap HPI, said: “The industry is changing at an unprecedented pace and Cap HPI has invested in its people, data and technology to ensure its customers can enjoy the best possible tools to drive both efficiency and profits.
“It was important to us that we work with independent and respected experts to validate our methodology.
“The project with the ITS has highlighted that our approach continues to pay dividends for our customers.
“As part of Solera, we have an unrivalled view of the automotive lifecycle and can bring that expertise to meet the challenges our sector faces.”
The data showed that smaller dealerships with an average of six sites can make savings of more than £30,000-a-year by ensuring that accuracy of its used car data.